Last year we saw a strong performance by gold as it broke past previous all-time highs and set a new milestone above $2,000.
This wasn’t the case for gold at the beginning of this year. Gold’s price retraced to retest levels around $1,700.
However, some may seem to forget that even in a bull run, no asset goes directly up.
And as of lately, gold reminded the non-believers that it still has room to grow as it made its most significant monthly gain in May in nearly a year.
In a recent Bloomberg article, Ole Hansen, head of commodity strategy at Saxo Bank A/S, had the following to say,
“Gold is heading for its biggest monthly gain since July as inflation remains the key focus.”
“The recovery in ETF holdings backed by bullion and fund positions in futures remain subdued, a sign that many investors remain unconvinced about the short to medium-term direction.”
In May, gold saw gains up to 7.8%, reaching $1,912.76, not far from its all-time high.
This has been a very keen level to analysts and investors, and now that the resistance seems to have been broken, many believe the sky’s the limit for gold.
An economist at Oversea-Chinese Banking Corp., Howie Lee, made the following comments in regards to gold’s recent breakout:
“With gold breaking above the $1,900 level, there is a clear bullish momentum with precious metal demand right now…”
Since gold has acted as a safe haven in uncertain times and used as a hedge against inflation, the first half of this year with the vaccine rollouts and “expected” unemployment recovery may have been the catalyst driving its price down.
However, with new mutating strains of COVID-19 and constant misses month after month with the unemployment recovery numbers, another all-time high record may be in store for gold.
Inflation has reached highs not seen since 2008, and we all remember what came in the following years…
The central banks are stuck as they can’t risk increasing interest to help fight inflation as it may result in “pricking the enormous bubbles” they’ve created, Diego Parrilla tells Bloomberg, who runs the Quadriga Igneo fund.
“We have entered a new paradigm that will be dominated by deeply negative real interest rates, high inflation, and low nominal rates — an extremely supportive environment for gold,” Parrilla stated.
This leaves us wondering how much higher gold will go on the next run-up.
Call American Hartford Gold today at 800-462-0071, because even with rising inflation numbers and failing unemployment recovery, there’s always gold to be found.